Woman accused of attempted knife attack near childcare

A WOMAN accused of chasing her victim down the street with a large knife may have her matter dealt with under the Mental Health Act.

Joanne O'Neill, 47, was extremely polite to Magistrate Geoff Dunlevy when she was brought onto the video link screen at Byron Bay Local Court from Sydney's Silverwater jail on Friday morning.

But the charges against the woman from Bomaderry in the Shoalhaven area paint a picture of a woman haunted by delusions as she allegedly terrorised a 20-year-old woman in broad daylight.

The alleged incident took place as parents were picking up their children from a child care near the corner of Bangalow Rd and Blackbutt Place in Byron Bay on the afternoon of September 12 last year.

Police have alleged the woman, who has had a schizoid personality disorder for many years, began repeatedly screaming at the victim that she would kill her and lunging at her with a knife.

The woman was restrained by passersby as police were called.

The defendant's solicitor Katharine Brody told the court they hoped to have the matter dealt with under the Mental Health Act, to divert the woman to treatment.

Ms Brody indicated the woman would otherwise plead not guilty to her charges of being armed with intent to cause grievous bodily harm, common assault, custody of a knife in a public place, wielding a knife in a public place and affray.

Pending the Mental Health Act application, she had lodged no formal pleas.

The court heard the woman claimed "a spirit angel told her to do it" and that she believed the victim had slept with her boyfriend.

Ms Brody said the woman had not purchased the knife, and others found in her car, with the intent to cause anyone harm.

She said the woman was "stabilised and compliant with medication" since being taken into custody in September.

Magistrate Geoff Dunlevy said the woman had no criminal history in NSW and only a "relatively minor", unrelated history from Victoria.

Mr Dunlevy did not rule out the woman's suitability for treatment under the Mental Health Act, and will hear further on the application when the matter returns to court next month.